Asustek and Gigabyte have just agreed to a major combined arms strategy

So it's not as big of news as the recent AMD and ATI merger,
but cross-town Taipei rivals Asustek and Gigabyte have just announced a major
joint venture between the two companies. The new joint venture will
effectively let Gigabyte use Asustek facilities for manufacturing of
"Gigabyte" branded video cards and motherboards.

Gigabyte will own a 51% stake in the company, with Asustek picking up the other
49%. HKEPC
(English)
reports the deal is valued at approximately $244M USD, and that the new joint venture will become official January 1, 2007. Neither company
would comment on the effect of the joint venture on existing manufacturing,
claiming that only the legal proceedings to start the company have been
publically announced at this time. The joint venture will also get a new
name, but both companies are also tight lipped about that as well.

Analysts are already heralding the venture as a major milestone for the
PC industry. Occasional DailyTech blogger and T-Break
Editor-In-Chief Abbas Jaffar Ali claimed "By combining the
manufacturing capability of ASUS with the channel presence of Gigabyte, the two
companies will be able to put tremendous pressure on the other Taiwan
manufactures, especially Foxconn." Peter du Preez, Universal Abit Marketing Manager, added "It all started way back when ULi and NVIDIA joined -- since then, well, it's been all about grabbing a buddy."

ASUS and Gigabyte have traditionally held the title of tier-1 motherboard
manufacturers in Taiwan. This title was also shared by Microstar
International -- also a major player in motherboard, VGA and server manufacturing.
However, as PC component manufacturing began to move to mainland China, Foxconn
and ECS-Tatung have risen to become the dominant component manufacturers.

ASUS has strong manufacturing ties with Sony (Playstation 3), Apple
(MacBook). The company has also attempted to enter into the retail market
with its own lineup of notebooks and digital audio players, with mixed success.
Earlier this year ASUS stated that the company would split its OEM and retail
manufacturing by 2008, in
an effort to give the manufacturing half of the company more room to compete
with the "Big
Four."

That's not to say ASUS and Gigabyte have idle competition. ECS, currently
the largest motherboard manufacturer in the world by volume, just sealed a deal to
acquire Uniwill, making the new company even more massive than it was
before.

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard